While the thought of entering your home and being welcomed by your loved ones puts a smile on your face, the thought of not being there for them can be worrying. This is especially true if you are the sole breadwinner of the family.
Even though it is impossible to put a price on someone’s life, it is crucial to be financially prepared for such uncertainties in life. Taking the best life insurance policy in India can help secure the financial future of your loved ones.
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However, before buying a life insurance policy, it’s important to know a few things.
Life Insurance Policy: An Overview
Life is filled with uncertainties, making it important to ensure the protection of your family. This can be done by securing them with a life insurance policy.
A life insurance policy is a legal agreement between the insurance provider and the policyholder. The insurance provider agrees to pay a certain amount as decided at the policy’s inception upon the insured’s death. This amount is paid in exchange for payments of a fixed amount at regular intervals.
The amount that the insurance service provider promises to pay is called the sum assured, and the periodic amount paid is called a premium.
A life insurance policy can be bought both online and offline. Besides, an insurance agent can educate you about the best life insurance policy in India. Many insurance companies provide special life insurance schemes online that can be bought in a few clicks.
Another thing to know is that the amount given on the insured’s death is known as a death benefit. It is provided to the nominee assigned by the policyholder.
Importance of Buying a Life Insurance Policy
Now that you have gone through the life insurance explained, are you wondering why it is really important?
Taking the best life insurance policy in India can protect your partner and children from devastating financial conditions. It not only provides financial security but helps pay debts, living expenses and medical expenses.
Besides, you’ll have the option to tailor a life policy according to your needs. You can get additional benefits with riders with a slight increase in premium. All this helps provide lasting peace of mind.
How Can You Find the Best Life Insurance Policy in India?
Choosing the best life insurance policy in India can be overwhelming if you’re not aware of what to look for. Take a look at the factors to consider before taking a life insurance policy.
Assess Your Financial Situation
It is essential to have a true picture of your financial situation before you decide what type of life insurance you need.
Consider what you already have in place for the dependents in your family. This includes retirement savings, emergency savings and life insurance coverage through work. In case you don’t have enough, discuss things with a financial planner.
Calculate the Optimal Coverage
Most financial advisors suggest taking life insurance that is ten times your annual income. Also, never underestimate how much life insurance you need.
In addition, there are several things to consider while calculating the optimal coverage. For example, consider the EMIs that your family might find difficult to pay if you have debts. You must also arrange enough funds for your child’s higher education or marriage.
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Determine the Premium Amount
You can easily determine the premium amount by using some online calculators. Also, it’s important to compare different plans to find a life insurance policy that offers the highest coverage. Most importantly, the premium rate should fit your budget.
Select the Term
The optimal term of the life insurance policy should be the number of years your family members would be dependent on you. The rule of thumb is to deduct your current age from the age at which your income would stop.
Be Ready to Answer
While taking the best life insurance policy in India, you must be prepared to answer a lot of queries. The quote received from the insurer will only be an estimate of the premium. However, you will be required to fill out a lengthy application form to get a policy.
The insurance provider will ask questions about your age, medical history of self and family, tobacco use, etc. You will also be questioned about how risky your job or hobbies are to determine the actual insurance rate. Make sure you offer accurate information.
Read the Final Insurance Policy Carefully
Before making the final commitment, read the final policy carefully. Understand the terms and conditions and find relevant details like the lock in period and circumstances in which you cannot make claims.
Final Thoughts
Buying a life insurance plan is the best decision to make for the protection of your loved ones. It acts as a monetary safety net and can offer valuable benefits.
Of course, you need to make a long-term commitment to paying a premium towards the policy. However, the benefits totally justify the premium amount.
Compare different life insurance policies and buy the one that offers the best financial coverage.
